Talks had been under way for at least six months about a
mix of current-generation Boeing 737s or Airbus A320s plus
variants with new, more-efficient engines, said the people, who
declined to be identified because details aren’t public.

A United deal would cement ties to a longtime customer and
build on Boeing’s victory over Airbus in winning a 100-plane
purchase from Delta Air Lines Inc. (DAL) in August. Airbus and Boeing,
split a 460-jet order with AMR Corp. (AAMRQ)’s American Airlines in
July. The list value for 200 737s would be about $16.9 billion,
based on the $84.4 million retail price of the 737-800.

“If United goes with Boeing for this order we see this as
a helpful market-share gain,” Robert Stallard, an RBC Capital
Markets analyst in New York, said in a note to clients. He has
an outperform rating on Boeing, which like United is based in
Chicago.

Spokesmen for United, Boeing and Toulouse, France-based
Airbus all declined to comment about the status of the latest
negotiations.

Boeing slid 0.9 percent to $72.86 at the close in New York
as U.S. stocks slumped, while United, the world’s largest
airline, fell 0.3 percent to $22.85. Airbus parent European
Aeronautic, Defence & Space Co. dropped 4.4 percent to 29.25
euros earlier in Paris.

Aircraft Options

Some of the planes in the 200-jet total may be options for
future aircraft, said the people. The value of the order may
rise once United settles on terms, because the 737-800 is less
expensive than the so-called MAX model with upgraded engines.
Airlines typically buy at a discount.

The 737 is the world’s most widely flown airliner, and
Boeing planes account for more than three-fourths of the main
fleet of 701 jets at United Continental, which was formed in the
2010 merger between UAL Corp. and Continental Airlines Inc.

Continental had an exclusive relationship with Boeing
dating back two decades. The new United is run by Jeff Smisek,
who joined Continental in 1995 and was chief executive officer
during the merger talks. United’s fleet management group is
overseen by Gerry Laderman, senior vice president of finance and
treasurer, who joined Continental in 1988.

“It will be a nice win for Boeing and GE,” Jeff Sprague,
co-founder of Stamford, Connecticut-based Vertical Research
Partners, said in a telephone interview. “Although the new
company is called United, it’s really being run by Continental
management and they’ve always been a Boeing carrier. It was
probably natural for them to go toward Boeing and CFM for fleet
commonality.”

Boeing is trying to reclaim the top spot in commercial
production lost to Airbus in 2003. Airbus had record orders of
1,419 aircraft last year, while Boeing’s tally was 805. Airbus
has said 2012 orders may fall by half as an initial flurry of
purchases of its A320neo wanes.

United is refreshing a single-aisle fleet that includes
Boeing 757-200s, with an average age of 18.2 years, and 737-500s
that average 16.6 years old. Boeing no longer makes either
model.

Before the merger creating the new airline, UAL’s United
agreed in December 2009 to split an order for 50 wide-body jets
between Boeing and Airbus. That deal was for 25 Boeing 787
Dreamliners and the same number of Airbus A350s.